Pork Commentary: NPPC Fights for Hog Producers!

CANADA - This weeks Pork Commentary from Jim Long.
calendar icon 13 March 2007
clock icon 5 minute read

The stormy weather of two weeks ago played havoc with hog supply last week. Hogs, backed up due to the inability to get to market during the storms, pushed last week’s US marketings to 2.128 million and the Iowa-Minnesota lean hog price down to 59.81 Friday (week before 62.29). The two weeks of marketings 1.896 million and 2.128 million, when combined, average just around two million a week, which is in line with market expectations. The latest Iowa-Minnesota weights are averaging 268.2 lbs. This is 1.7 lbs lower than a year ago - a reflection of relatively current marketing.

With May lean hog futures closing last Friday at 77.35, it doesn’t take an economist to figure out that we need to get some giddy up in hog prices in the next few weeks to reach levels $35.00 per head better than they are now. In our opinion, this will happen and hog prices will be high enough to carry the high cost of feed everyone is experiencing.

NPPC Calls for the End of Ethanol Subsidies

At last week’s National Pork Producers Council Annual Meeting, several resolutions were made. These included support to end the 51¢ gallon ethanol blenders’ tax credit and the 54¢ gallon tariff on imported ethanol. The blenders’ credit is set to expire D ec 31, 2010 – the import tariff, D ec 31, 2008.

Makes sense to us. Tariffs on ethanol importation is counter-productive. Sugar cane is a significantly more efficient source of ethanol compared to corn, and restricting development of sugar cane ethanol in the Caribbean and Central America is politically, socially and economically unwise. Let the countries that have few resources but have the ability to produce sugar-based ethanol become engaged on a level playing field.

Another NPPC resolution was for support incentives for capturing and digesting methane from swine farms as an alternative energy source. Good idea – and if we hurry up, we can catch up to Mexico . In Mexico , hundreds of farms are already capturing the benefits of Methane digesters. Energy companies are providing free methane digester systems that not only diminish odor, but generate electricity. The green energy credits are sold to polluting companies (other industries) as part of the Kyoto Accord. Good D eal. Mexican producers get the electricity free to power their farms while cutting down odor. The US industry would benefit from such a program.

The NPPC also supports early release of land (without penalty) out of the US D A conservation reserve program and put those acres back into crop production. This also makes sense. Instead of paying farmers to grow weeds, let them produce crops to feed people. The program was never about conservation, it was always about supply of grain production. It’s no longer necessary.

It’s good to see the NPPC showing leadership in such important matters. The lunacy of corn ethanol tariffs and subsidization is destabilizing US and world food supplies. Indeed, meat protein production will plummet worldwide if a balance is not put in place between energy needs and food.

The NPPC is the pork industry’s lobby. Now it needs to be supported to fight for the rights of the pork industry. Collective support for NPPC is a good business decision for all swine producers in the battle for reasonable feed costs.

In the past, we have hammered the NPPC and National Pork Board for the other white meat programs - for not only being ineffective in increasing per capita consumption, but for its failure to differentiate as a product. We still feel the same, but now with the ethanol crisis, the NPPC has a chance to earn its money. If ever there was a clear fight to be won, it’s now. The future shape of the pork industry is before us.

Country of Origin Labeling (COOL)

A couple of wannabee legend-makers, Senators Craig Thomas (R-WY) and D enny Rehberg (R-MT), (if you’ve never heard of them, join the crowd) have introduced legislation that would move the implementation date of COOL to Sept 30,2007 from Sept 30, 2008.

These COOL advocates should check how COOL has affected the seafood industry. According to the Food Mark eting Institute, in two and a half years, COOL has not increased sales of US seafood and the supermarkets’ cost to implement the law is up to “ten times higher” than was expected by the US D A. Perfect government program – no increase in sales but an increase in costs. D o you think pork would be any different? Poultry would be exempt from COOL.Now, that will be a level playing field.

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